Mass storage mode is working fine for me on PR1.3 (flash method, not OTA).
@CraigRobbo: That's correct: no output, suggesting there are no open files. Does any USB activity work correctly for you? Things like Ovi Suite? I'm worried perhaps your N900's USB port is starting to fail.

After choosing mass storage this command should also give no output:
mount | grep MyDocs

For reference when I connect and select mass storage mode dmesg on the N900 shows:
[79336.038452] musb_hdrc periph: enabled ep1in for bulk IN, maxpacket 512
[79336.038482] musb_hdrc periph: enabled ep1out for bulk OUT, maxpacket 512
[79336.038513] g_file_storage gadget: high speed config #1

On my desktop dmesg gives:
[5433091.628648] hub 1-0:1.0: state 7 ports 10 chg 0000 evt ff80
[5433091.628666] ehci_hcd 0000:00:02.1: GetStatus port 7 status 001403 POWER sig=k CSC CONNECT
[5433091.628674] hub 1-0:1.0: port 7, status 0501, change 0001, 480 Mb/s
[5433091.654957] ehci_hcd 0000:00:02.1: GetStatus port 7 status 001002 POWER sig=se0 CSC
[5433091.758023] hub 1-0:1.0: debounce: port 7: total 125ms stable 100ms status 0x100
[5433091.758031] hub 1-0:1.0: state 7 ports 10 chg 0000 evt f880
[5433091.971241] hub 1-0:1.0: state 7 ports 10 chg 0000 evt ff80
[5433091.971267] ehci_hcd 0000:00:02.1: GetStatus port 7 status 001403 POWER sig=k CSC CONNECT
[5433091.971274] hub 1-0:1.0: port 7, status 0501, change 0001, 480 Mb/s
[5433092.075023] hub 1-0:1.0: debounce: port 7: total 100ms stable 100ms status 0x501
[5433092.126289] ehci_hcd 0000:00:02.1: port 7 high speed
[5433092.126295] ehci_hcd 0000:00:02.1: GetStatus port 7 status 001005 POWER sig=se0 PE CONNECT
[5433092.177028] usb 1-7: new high speed USB device using ehci_hcd and address 37
[5433092.228261] ehci_hcd 0000:00:02.1: port 7 high speed
[5433092.228266] ehci_hcd 0000:00:02.1: GetStatus port 7 status 001005 POWER sig=se0 PE CONNECT
[5433092.292761] usb 1-7: default language 0x0409
[5433092.293129] usb 1-7: udev 37, busnum 1, minor = 36
[5433092.293131] usb 1-7: New USB device found, idVendor=0421, idProduct=01c7
[5433092.293133] usb 1-7: New USB device strings: Mfr=1, Product=2, SerialNumber=3
[5433092.293135] usb 1-7: Product: N900 (Storage Mode)
[5433092.293136] usb 1-7: Manufacturer: Nokia
[5433092.293138] usb 1-7: SerialNumber: <redacted for security reasons>
[5433092.293269] usb 1-7: usb_probe_device
[5433092.293273] usb 1-7: configuration #1 chosen from 2 choices
[5433092.294006] usb 1-7: adding 1-7:1.0 (config #1, interface 0)
[5433092.294146] libusual 1-7:1.0: usb_probe_interface
[5433092.294151] libusual 1-7:1.0: usb_probe_interface - got id
[5433092.294163] usb-storage 1-7:1.0: usb_probe_interface
[5433092.294167] usb-storage 1-7:1.0: usb_probe_interface - got id
[5433092.294244] scsi20 : usb-storage 1-7:1.0
[5433097.295819] scsi 20:0:0:0: Direct-Access Nokia N900 031 PQ: 0 ANSI: 2
[5433097.296302] scsi 20:0:0:1: Direct-Access Nokia N900 031 PQ: 0 ANSI: 2
[5433097.296750] sd 20:0:0:0: Attached scsi generic sg6 type 0
[5433097.297512] sd 20:0:0:1: Attached scsi generic sg7 type 0
[5433097.300417] sd 20:0:0:0: [sde] Attached SCSI removable disk
[5433097.301038] sd 20:0:0:1: [sdf] Attached SCSI removable disk
[5433133.939544] sd 20:0:0:0: [sde] 56631296 512-byte logical blocks: (28.9 GB/27.0 GiB)
[5433133.939915] sd 20:0:0:0: [sde] Assuming drive cache: write through
[5433133.941168] sd 20:0:0:0: [sde] Assuming drive cache: write through
[5433133.941173] sde:
[5433135.952288] sd 20:0:0:1: [sdf] 15659008 512-byte logical blocks: (8.01 GB/7.46 GiB)
[5433135.960282] sd 20:0:0:1: [sdf] Assuming drive cache: write through
[5433135.992271] sd 20:0:0:1: [sdf] Assuming drive cache: write through
[5433135.992274] sdf: sdf1 sdf2